Pull the plug or double down? Why one brokerage invested in new tech to get more value from their low-conversion paid leads

Stephens Real Estate describes themselves as a "traditional, full-service brokerage." And everything from their location — in the heartland of Lawrence, Kansas — to their business model does seem pretty conventional.

But when new broker/owners Pat McCandless and Chris Earl stepped in to run the firm in 2013, they knew that continued success would require that they innovate and invest in technology for their agents and clients.

Here's how they created an office technology culture that didn't interfere with the company's longstanding traditions.

Q. You recently had to choose whether to invest more or pass on your primary online portal contract. What provoked this?

Pat McCandless: We purchased the company in January 2013, and for the first year we really just focused on not interfering in any way that would derail their longstanding success.  We are one of the top companies in the area and our reputation is excellent. But we did realize our support systems were out of date; in order for our agents to maintain our standards of service, we had to update those support and tech systems.

Q. What systems are you talking about, and how did you first learn that your systems were no longer efficient?

Chris Earl: Two weeks before renewal of our contract with realtor.com®, our sales representative, Richard McDonald, came to explain changes to our existing offering. The program we had been using was being transitioned and we weren't able to renew the contract for our web leads in its current form.

Surprisingly, Richard did not recommend we go forward with a different product. He had conducted an analysis of the response rate we were providing for leads, and it was less than ideal. Some leads were responded to quickly, others were not and some did not receive any response at all. Our conversion rate was at 3-4 percent, when it should have been 8, 9 or 10 percent.

Richard told us we'd be wasting our money to keep purchasing the leads without making any changes to increase our response rate.

Q. It's not everyday when a vendor or sales rep tells you to cancel your contract. What was your reaction?

Chris: Absolutely. At first, we talked to Richard more to learn about the long-term effects of low lead response and low lead conversion. We discovered that for every lead that was responded to late or not at all, we weren't just losing the lead. It was also tarnishing our brand and our reputation.

We knew we needed to commit to increasing our response rate, no matter what leads (or whose leads) we were working. Together, Richard helped us to commit to FiveStreet, which captures new leads and sets a follow-up plan into action.

We instituted new follow-up standards across the brokerage, giving the listing agent the opportunity to respond in the first five minutes, then broadcasting the lead to an available agent if the listing agent hadn't replied. We also brought in Top Producer CRM to help our agents manage their contacts and reach out to their clients in a simple, convenient way.

Q. How did the team react?

Chris: The agents were a little surprised when we asked them to commit to these programs. Change can be hard, but our Top Producer team worked closely with us and our agents. They explained that we were investing in better tools to help our sales team succeed.

Q. That's a big change for a company that prided itself on a traditional model. Did you see any immediate benefits?

Pat: These programs enable everyone on our sales team to be more efficient, but the biggest opportunity in my mind will be the consistent follow-up we can now assure by providing Top Producer® as the CRM.

We're also seeing that by improving our response times to consumers, we are really building our brand with the new leads and our seller clients. Now during listing presentations, we can tell our prospective clients, "If I cannot respond to an inquiry about your home within five minutes, someone on my team will."  This gives us a great competitive advantage.

Q. It sounds like you're pretty satisfied with where you ended up.

Chris: We needed to provide better tools for our agents to succeed – that is the bottom line. The setup was fabulous; we could not have asked for a better implementation team. A couple of minor hiccups in the initial setup were quickly addressed as well.

Pat: We are not a mega-franchise company. Our dedicated team is comprised of local agents who are the best in this area.  We are only as good as every member of our team, and I believe arming them with these tools will enable each of them to perform at their very best.